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Microsoft may offer Windows Phone and Windows RT for free to compete with Android

Microsoft is mulling to offer free versions of Windows Phone and Windows RT for device manufacturers to better compete with Android. The Verge reports that sources familiar with Microsoft’s plans revealed to them Microsoft is seriously thinking not to collect licensing fees from device manufacturers for these two operating systems.
Microsoft’s Windows Phone is lagging behind other operating systems like iOS and Android. Android is commanding greater market share, it is free for everyone and it has very good app ecosystem around it that gives greater advantage to device manufacturers. In contrast Microsoft collects licensing fees from device manufacturers and its app ecosystem is not that great. By freeing up the licensing costs Microsoft hopes that device manufacturers will build devices with its Windows Phone and Windows RT operating systems.

Nokia so far has the most Windows Phone market share at around 90% and others like Samsung and HTC released few handsets and they are reluctant to push their Windows Phone devices like they do with the Android devices. Some of the low-end Nokia Windows Phones like Lumia 520 are highly successful in emerging markets and freeing the OS will help these kind of devices at lower price points that will help WP to gain market share.

These updates will become part of the Windows Threshold update. To offset the revenue lost due to the lack of license fees, Microsoft might push users to subscribe to its paid services like SkyDrive, Office and Skype. It might also generate revenue from in-app ads and through Bing searches.